GRANGE RESOURCES LIMITED. — Capital/Financing Update 2007

Oct 2, 2007

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STOCK EXCHANGE ANNOUNCEMENT ISSUE OF SECURITIES AND APPENDIX 3B

3 October 2007

The directors of Grange Resources Limited ("Grange") advise that a total of 9,000,000 fully paid ordinary shares ("Shares"), 9,000,000 Unlisted Options, exercisable at $1.50 and expiring three years after the date of issue (“Three Year Options”) and 8,500,000 Unlisted Options, exercisable at $1.95 and expiring one year after the date of issue (“One Year Options”) have been issued to Hamersley Holdings Limited as part of the consideration for the acquisition by Grange of Exploration Licence 70/2512.

In accordance with section 708A(5)(e) of the Corporations Act, Grange gives notice that:

• (a) the Shares have been issued to Hamersley Holdings Limited at a deemed issue price of $2.49 per share pursuant to section 708(15) of the Corporations Act;

• (b) the Three Year Options have been issued to Hamersley Holdings Limited at a deemed issue price of $1.50 per share pursuant to section 708(15) of the Corporations Act;

• (c) the One Year Options have been issued to Hamersley Holdings Limited at a deemed issue price of $0.90 per share pursuant to section 708(15) of the Corporations Act;

• (d) Grange issued the Securities identified above without disclosure to Hamersley Holdings Limited under Part 6D.2 of the Corporations Act;

• (e) this notice is being given under section 708(5)(e) of the Corporations Act;

• (f) as at the date of this notice, Grange has complied with:

• (i) the provisions of Chapter 2M of the Corporations Act; and

• (ii) section 674 of the Corporations Act;

• (g) there is no information to be disclosed which is excluded information, as defined in sections 708A(7) and 708A(8) of the Corporations Act, as at the date of this notice.

• An application for quotation of the Shares on ASX is being made and Appendix 3B is attached.

For further information visit the Grange website at www.grangeresources.com.au or alternatively contact Neil Marston on + 61 (8) 9321 1118.

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NEIL MARSTON

Company Secretary

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Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002.

NAME OF ENTITY

Grange Resources Limited

ABN

80 009 132 405

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

• 1 +Class of +securities issued or to be issued (a) Ordinary Fully Paid Shares (b) Options – Unlisted (c) Options – Unlisted

• 2 Number of[+] securities issued or to be issued (if known) or maximum number (a) 9,000,000 which may be issued (b) 8,500,000 (c) 9,000,000

• 3 Principal terms of the[+] securities (eg, if options, exercise price and expiry date; (a) Not Applicable if partly paid[+] securities, the amount (b) Unlisted Options exercisable at $1.95 and outstanding and due dates for payment; expiring on 28 September 2008.

• if[+] convertible securities, the conversion (c) Unlisted Options exercisable at $1.50 and

• price and dates for conversion) expiring on 28 September 2010.

• See chapter 19 for defined terms.

Appendix 3B Page 1

11/3/2002

• 4 Do the[+] securities rank equally in all respects from the date of allotment with (a) Yes an existing[+] class of quoted[+] securities? (b) Not Applicable

• If the additional securities do not rank equally, please state: • the date from which they do (c) Not Applicable • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 5 Issue price or consideration

• (a) Deemed issue price of $2.49 per share. (b) Deemed issue price of $0.90 per September 2008 unlisted option.

• (c) Deemed issue price of $1.50 per September 2010 unlisted option

Issued as part consideration for the acquisition of Exploration Licence 70/2512 and Mineral Information	Issued as part consideration for the acquisition of Exploration Licence 70/2512 and Mineral Information
28 September 2007
**Number **	~~+~~Class
115,201,099	Ordinary Fully Paid Shares

• 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)

• 7 Dates of entering +securities into 28 September 2007 uncertificated holdings or despatch of certificates

• 8 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 2 if applicable)

• See chapter 19 for defined terms.

Appendix 3B Page 2

11/3/2002

9 Number and+class of all+securities not quoted on ASX (_including_the securities in clause 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	**Number **	~~+~~Class
	1,500,000 8,500,000 9,000,000 1,000,000	Options exercisable at $1.50 and expiring on 30 June 2008 Options exercisable at $1.95 and expiring on 28 September 2008 Options exercisable at $1.50 and expiring on 28 September 2010 Options exercisable at $2.50 and expiring on 30 June 2011
	Not Applicable

Part 2 - Bonus issue or pro rata issue

• 11 Is security holder approval required?

• 12 Is the issue renounceable or nonrenounceable?

• 13 Ratio in which the[+] securities will be offered

• 14 +Class of +securities to which the offer relates

• 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?

• 17 Policy for deciding entitlements in relation to fractions

• 18 Names of countries in which the entity has[+] security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7.

• 19 Closing date for receipt of acceptances or renunciations

• See chapter 19 for defined terms.

Appendix 3B Page 3

11/3/2002

20	Names of any underwriters
21	Amount of any underwriting fee or
	commission
22	Names of any brokers to the issue
23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee payable to
	brokers who lodge acceptances or
	renunciations on behalf of+security
	holders
25	If the issue is contingent on+security
	holders’ approval, the date of the
	meeting
26	Date entitlement and acceptance form
	and prospectus or Product Disclosure
	Statement will be sent to persons
	entitled
27	If the entity has issued options, and the
	terms entitle option holders to
	participate on exercise, the date on
	which notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do+security holders sell their
	entitlements_in full_through a broker?
31	How do+security holders sell_part_of
	their entitlements through a broker and
	accept for the balance?
32	How do+security holders dispose of
	their entitlements (except by sale
	through a broker)?
33	+Despatch date

• See chapter 19 for defined terms.

Appendix 3B Page 4

11/3/2002

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities ( tick one )

• (a) � Securities described in Part 1

• (b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

(If the additional securities do not form a new class, go to 43)

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional[+] securities setting out the number of holders in the categories

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

Appendix 3B Page 5

11/3/2002

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of+securities for which quotation is sought 40 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted+securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) 42 Number and+class of all+securities quoted on ASX (_including_the securities in clause 38)	Not Applicable
	**Number **	~~+~~Class

• See chapter 19 for defined terms.

Appendix 3B Page 6

11/3/2002

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 3 October 2007_____ ( ~~Director~~ / Company Secretary) Print name: Neil Marston.

• See chapter 19 for defined terms.

Appendix 3B Page 7

11/3/2002